Ronald is an Economics students who likes to spend his leisure time of sixty hours a month doing one of two activities: watching movies at Dendy Cinemas Newtown (x), and indoor-climbing (y). A trip to the movies takes 3 hours, and each visit to the climbing gym lasts 5 hours. Further, suppose that Ronald has a fixed monthly monetary budget to spend on leisure activi- ties. He currently exhausts this entire budget by watching two movies and visiting the climbing gym fifteen times. With this monthly budget, he would also have been able to afford exactly seven movies and six visits to the climbing gym. Assume that both goods are perfectly divisible. (a) Write down Ronald's money and time constraints as algebraic inequalities. (b) Show, using algebra, that Ronald's two budget lines intersect at the bundle (x, y) (5.5, 8.7). = (c) Plot Ronald's money constraint using a red dotted line. Plot Ronald's time constraint using a blue dotted line. Clearly label each constraint, any axis intercepts, and any points of intersection between the two constraints. Shade in Ronald's budget set, using solid black lines to indicate where the boundaries of the budget set are.

Ronald is an Economics students who likes to spend his leisure time of sixty hours a month doing one of two activities: watching movies at Dendy Cinemas Newtown (x), and indoor-climbing (y). A trip to the movies takes 3 hours, and each visit to the climbing gym lasts 5 hours. Further, suppose that Ronald has a fixed monthly monetary budget to spend on leisure activi- ties. He currently exhausts this entire budget by watching two movies and visiting the climbing gym fifteen times. With this monthly budget, he would also have been able to afford exactly seven movies and six visits to the climbing gym. Assume that both goods are perfectly divisible. (a) Write down Ronald's money and time constraints as algebraic inequalities. (b) Show, using algebra, that Ronald's two budget lines intersect at the bundle (x, y) (5.5, 8.7). = (c) Plot Ronald's money constraint using a red dotted line. Plot Ronald's time constraint using a blue dotted line. Clearly label each constraint, any axis intercepts, and any points of intersection between the two constraints. Shade in Ronald's budget set, using solid black lines to indicate where the boundaries of the budget set are.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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